Kuala Lumpur: “Grow cautiously and be conscious of contractual commitments.” That’s the advice to owners from Philip Teoh, a partner at fast growing Malaysian law firm, Azmi & Associates. “Sometimes,” he continues, “good rates and contracts can be secured but can the counterparty perform? Beyond a certain rate the contractors will no longer earn. Obtaining a bid at a low price is counter-productive if the earnings cannot sustain the project commitment.”
The law firm now has 70 lawyers and 15 trainees, its senior partner formerly an employee at state-run energy giant, Petronas.
Declining oil prices have hit the offshore support scene in Malaysia hard, Teoh recounts. “Overall the industry has become more conscious of costs,” he says, adding: “I am also seeing claims for non-payment of charter-hire and breach of contract, which is symptomatic of a downturn.”
While Malaysian maritime law is British based, Teoh advises Malaysian judges do not necessarily follow the same path as English judges as there is some allowance for adaptation to local conditions. “It all depends on how the lawyer argues the matter before the judge,” he explains.